Investments

9 Months Ended

Sep. 30, 2023

The details of our investments are set forth below:


Accounting Method	September 30, 2023		December 31, 2022		Ownership (a)
	in millions				%
Equity (b):
Long-term:
VMO2 JV	$	8,896.5	$	9,790.9	50.0
VodafoneZiggo JV (c)	2,180.2		2,345.8		50.0
AtlasEdge JV	247.4		122.2		48.0
All3Media Ltd. (All3Media)	131.0		143.9		50.0
Formula E Holdings Ltd (Formula E)	88.6		87.3		35.9
nexfibre JV	61.7		52.4		25.0
Other	129.2		134.6
Total — equity	11,734.6		12,677.1
Fair value:
Short-term:
Separately-managed accounts (SMAs) (d)	1,557.0		2,621.6
Long-term:
Vodafone - subject to re-use rights (e)	1,251.8		—		4.9
Televisa Univision, Inc. (Televisa Univision)	385.5		385.5		6.3
ITV plc (ITV)	343.5		362.4		9.9
EdgeConneX, Inc. (EdgeConneX)	263.3		183.8		5.2
SMAs (d)	240.7		233.0
Plume Design, Inc. (Plume) (f)	191.0		246.2		11.5
Lacework, Inc. (Lacework)	116.9		242.8		3.2
Pax8, Inc.	88.6		99.0		5.6
CANAL+ Polska S.A.	73.9		66.1		17.0
Aviatrix Systems, Inc.	54.3		78.2		3.3
Lions Gate Entertainment Corp. (Lionsgate)	54.0		36.7		2.8
Other	388.8		337.7
Total — fair value	5,009.3		4,893.0
Total investments (g)	$	16,743.9	$	17,570.1
Short-term investments	$	1,557.0	$	2,621.6
Long-term investments	$	15,186.9	$	14,948.5

_______________

(a)Our ownership percentages are determined based on our legal ownership as of the most recent balance sheet date or are estimated based on the number of shares we own and the most recent publicly-available information.

(b)Our equity method investments are originally recorded at cost and are adjusted to recognize our share of net earnings or losses of the affiliates as they occur rather than as dividend distributions are received, with our recognition of losses

generally limited to the extent of our investment in, and loans and commitments to, the investee. Accordingly, the carrying values of our equity method investments may not equal the respective fair values. At September 30, 2023 and December 31, 2022, the aggregate carrying amounts of our equity method investments exceeded our proportionate share of the respective investee’s net assets by $1,170.5 million and $1,196.8 million, respectively, which primarily includes amounts associated with the VodafoneZiggo JV Receivables, as defined below, and amounts we are owed under a long-term note receivable from All3Media.

(c)Amounts include certain notes receivable due from a subsidiary of the VodafoneZiggo JV to a subsidiary of Liberty Global comprising (i) a euro-denominated note receivable with a principal amount of $740.4 million and $749.7 million at September 30, 2023 and December 31, 2022, respectively, (the VodafoneZiggo JV Receivable I) and (ii) a euro-denominated note receivable with a principal amount of $219.9 million and $222.7 million at September 30, 2023 and December 31, 2022, respectively, (the VodafoneZiggo JV Receivable II and, together with the VodafoneZiggo JV Receivable I, the VodafoneZiggo JV Receivables). The VodafoneZiggo JV Receivables bear interest at 5.55% and have a final maturity date of December 31, 2030. During the nine months ended September 30, 2023, interest accrued on the VodafoneZiggo JV Receivables was $41.4 million, all of which has been cash settled.

(d)Represents investments held under SMAs, which are maintained by investment managers acting as agents on our behalf. We classify, measure and report these investments, the composition of which may change from time to time, based on the underlying nature and characteristics of each security held under the SMAs. With the exception of our SMA in a leveraged structured note, all of our investments held under SMAs were classified as available-for-sale debt securities as of September 30, 2023. Our SMA held in a leveraged structured note is accounted for at fair value and the associated gains or losses are included in realized and unrealized gains (losses) due to changes in fair values of certain investments, net, in our condensed consolidated statements of operations. At September 30, 2023 and December 31, 2022, interest accrued on our debt securities, which is included in other current assets on our condensed consolidated balance sheets, was $26.3 million and $18.5 million, respectively.

(e)During the first quarter of 2023, we acquired 1,335 million shares of Vodafone at an average purchase price of £0.9195 ($1.1151 at the transaction date) per share. The aggregate purchase price of £1,227.6 million ($1,488.7 million at the transaction date) was funded with $269.2 million of cash on hand, net of a $0.3 million collar premium, and the remainder through a collar transaction (the Vodafone Collar Transaction). The Vodafone Collar Transaction includes a collar on the full amount of our Vodafone shares (the Vodafone Collar) and a loan (the Vodafone Collar Loan) collateralized by the Vodafone shares. Under the terms of the Vodafone Collar, the counterparty has the right to re-use pledged Vodafone shares. At September 30, 2023, after consideration of the Vodafone Collar Transaction, the net fair value of our investment in Vodafone is $168.8 million. For additional information regarding the Vodafone Collar Transaction, including a description of the related re-use rights and the impact on the dividends we receive on our Vodafone shares, see note 6.

(f)Our investment in Plume includes warrants with a fair value of $70.5 million and $92.2 million at September 30, 2023 and December 31, 2022, respectively.

(g)The purchase and sale of investments are presented on a gross basis in our condensed consolidated statements of cash flows, including amounts associated with SMAs.

Equity Method Investments

The following table sets forth the details of our share of results of affiliates, net:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions

VMO2 JV (a)	$	(198.0)	$	398.5	$	(187.6)	$	616.4
VodafoneZiggo JV (b)	(9.7)		92.6		(97.6)		224.6
Formula E	(11.6)		(15.1)		(21.0)		(16.8)
AtlasEdge JV	(4.8)		(5.2)		(15.2)		(13.3)
All3Media	(7.8)		(10.2)		(6.1)		(27.1)
nexfibre JV	(4.2)		41.6		2.1		41.6
Other, net	(4.7)		(1.2)		(15.7)		(12.8)
Total	$	(240.8)	$	501.0	$	(341.1)	$	812.6

_______________

(a)Represents (i) our 50% share of the results of operations of the VMO2 JV and (ii) 100% of the share-based compensation expense associated with Liberty Global awards granted to VMO2 JV employees who were formerly employees of Liberty Global prior to the VMO2 JV formation, as these awards remain our responsibility.

(b)Represents (i) our 50% share of the results of operations of the VodafoneZiggo JV and (ii) 100% of the interest income earned on the VodafoneZiggo JV Receivables.

VMO2 JV

Pursuant to an agreement (the U.K. JV Framework Agreement), Liberty Global provides certain services to the VMO2 JV on a transitional or ongoing basis (collectively, the U.K. JV Services). The U.K. JV Services provided by Liberty Global consist primarily of (i) technology and other services and (ii) capital-related expenditures for assets that will be used by or will otherwise benefit the VMO2 JV. Liberty Global charges both fixed and variable fees to the VMO2 JV for the U.K. JV Services it provides during the term of the U.K. JV Framework Agreement. We recorded revenue related to the U.K. JV Services of $34.2 million and $59.8 million during the three months ended September 30, 2023 and 2022, respectively, and $155.4 million and $192.4 million during the nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023 and December 31, 2022, $33.3 million and $37.0 million, respectively, was due from the VMO2 JV, primarily related to (a) the U.K. JV Services and (b) amounts incurred by Liberty Global for certain equipment and licenses purchased on behalf of the VMO2 JV. The amounts due from the VMO2 JV, which are periodically cash settled, are included in other current assets on our condensed consolidated balance sheets. In addition, during the nine months ended September 30, 2023, we received dividend distributions from the VMO2 JV aggregating $815.2 million, all of which was accounted for as a return of capital for purposes of our condensed consolidated statement of cash flows. During the nine months ended September 30, 2022, we received a dividend distribution from the VMO2 JV aggregating $467.9 million, of which $201.0 million was accounted for as a return on capital and $266.9 million was accounted for as a return of capital for purposes of our condensed consolidated statement of cash flows.

The summarized results of operations of the VMO2 JV are set forth below:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions

Revenue	$	3,503.8	$	3,042.1	$	10,058.0	$	9,642.7
Earnings (loss) before income taxes	$	(503.2)	$	1,178.7	$	(441.8)	$	1,646.4
Net earnings (loss)	$	(386.6)	$	832.2	$	(364.0)	$	1,238.7

VodafoneZiggo JV

Pursuant to an agreement (the NL JV Framework Agreement), Liberty Global provides certain services to the VodafoneZiggo JV (collectively, the NL JV Services). The NL JV Services provided by Liberty Global consist primarily of (i) technology and other services and (ii) capital-related expenditures for assets that will be used by, or will otherwise benefit, the VodafoneZiggo JV. Liberty Global charges both fixed and usage-based fees to the VodafoneZiggo JV for the NL JV Services provided during the term of the NL JV Framework Agreement. We recorded revenue from the VodafoneZiggo JV of $37.3 million and $75.4 million during the three months ended September 30, 2023 and 2022, respectively, and $157.8 million and $192.7 million during the nine months ended September 30, 2023 and 2022, respectively, primarily related to (a) the NL JV Services and (b) the sale of customer premises equipment (CPE) to the VodafoneZiggo JV at a mark-up. At September 30, 2023 and December 31, 2022, $37.9 million and $35.0 million, respectively, was due from the VodafoneZiggo JV related to the aforementioned transactions. The amounts due from the VodafoneZiggo JV, which are periodically cash settled, are included in other current assets on our condensed consolidated balance sheets. In addition, during the nine months ended September 30, 2022, we received dividend distributions from the VodafoneZiggo JV aggregating $186.9 million, all of which was accounted for as a return on capital for purposes of our condensed consolidated statement of cash flows.

The summarized results of operations of the VodafoneZiggo JV are set forth below:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions

Revenue	$	1,125.2	$	1,041.7	$	3,297.0	$	3,237.3
Earnings (loss) before income taxes	$	(82.2)	$	232.5	$	(332.4)	$	585.2
Net earnings (loss)	$	(63.6)	$	171.7	$	(279.2)	$	390.6

Fair Value Investments

The following table sets forth the details of our realized and unrealized gains (losses) due to changes in fair value, net:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions

Vodafone	$	35.7	$	—	$	(223.1)	$	—
Lacework	(31.3)		—		(125.9)		—
EdgeConneX	65.9		16.4		79.9		58.9
Plume	(4.0)		0.2		(55.2)		0.5
ITV	(2.6)		(62.6)		(18.9)		(342.2)
Lionsgate	(2.6)		(12.3)		17.3		(58.4)



Televisa Univision	12.1		26.2		4.7		58.0
SMAs	20.1		22.7		(1.2)		10.3
Other, net (a)	(21.8)		7.3		(22.4)		65.5
Total	$	71.5	$	(2.1)	$	(344.8)	$	(207.4)

_______________

(a)The nine-month periods include gains of $8.0 million and $12.0 million, respectively, related to investments that were sold during the second quarter of 2023 and 2022.

Debt Securities

The following tables set forth a summary of our debt securities at September 30, 2023 and December 31, 2022:


	September 30, 2023
	Amortized cost basis		Accumulated unrealized loss		Fair value
	in millions

Commercial paper	$	706.5	$	0.1	$	706.6
Government bonds	454.5		(0.8)		453.7
Certificates of deposit	335.4		—		335.4
Corporate debt securities	211.5		(1.5)		210.0
Structured note (a)	(a)		(a)		71.9
Other debt securities	20.1		—		20.1
Total debt securities	$	1,728.0	$	(2.2)	$	1,797.7

______________

(a)Amount represents an investment in a leveraged structured note issued by a third party investment bank, which is accounted for at fair value and classified within Level 2 of the fair value hierarchy. For further information regarding our fair value measurements, see note 7. The return on the leveraged structured note is based on changes in the fair value of a proportionate amount of debt issued by various Liberty Global consolidated subsidiaries and affiliates (including the VMO2 JV and the VodafoneZiggo JV). While the structured note itself contains leverage, our at-risk investment is the estimated fair value as reported. At September 30, 2023, the proportionate amount of debt issued by Liberty Global consolidated subsidiaries and affiliates associated with the return on the leveraged structured note is summarized in the following table:


	Proportion of debt associated with the return on the leveraged structured note

Subsidiary:
Telenet	29.16	%
UPC Holding	10.30	%

Affiliate:
VMO2 JV	57.63	%
VodafoneZiggo JV	2.91	%
Total	100.00	%


	December 31, 2022
	Amortized cost basis		Accumulated unrealized loss		Fair value
	in millions

Commercial paper	$	881.1	$	2.1	$	883.2
Government bonds	697.0		(1.4)		695.6
Certificates of deposit	520.5		(0.6)		519.9
Corporate debt securities	405.3		(4.8)		400.5
Other debt securities	355.0		0.4		355.4
Total debt securities	$	2,858.9	$	(4.3)	$	2,854.6

We received proceeds from the sale of debt securities of $1.8 billion and $2.6 billion during the three months ended September 30, 2023 and 2022, respectively, and $6.0 billion and $7.5 billion during the nine months ended September 30, 2023 and 2022, respectively, the majority of which were reinvested in new debt securities held under SMAs. The sale of debt securities resulted in realized net losses of $20.1 million and $1.5 million during the three months ended September 30, 2023 and 2022, respectively, and $52.8 million and $7.6 million during the nine months ended September 30, 2023 and 2022, respectively.

The fair values of our debt securities as of September 30, 2023 by contractual maturity are shown below (in millions):





Due in one year or less	$	1,557.0
Due in one to five years	238.4
Due in five to ten years	2.3

Total (a)	$	1,797.7

_______________

(a)The weighted average life of our total debt securities was 0.6 years as of September 30, 2023.

Our investment portfolio is subject to various macroeconomic pressures and has experienced significant volatility, which affects both our non-public and publicly-traded investments. Changes in the fair values of these investments, including changes with respect to interest rates within our local jurisdictions, are likely to continue and could be significant.